The Government of India has announced the removal of the 20% export duty on onions, effective from April 1, 2025. This significant decision, communicated by the Department of Consumer Affairs and formalized through a notification from the Department of Revenue, reflects the government's commitment to supporting onion farmers while ensuring that this essential commodity remains affordable for consumers.
In recent months, the Indian government implemented stringent measures to regulate onion exports, which included imposing an export duty, establishing a minimum export price (MEP), and enforcing a complete export ban for nearly five months, from December 8, 2023, to May 3, 2024. The 20% export duty, which will now be lifted, has been in place since September 13, 2024. This easing of restrictions is particularly timely as India navigates the complexities of ensuring the domestic availability of onions against the backdrop of previous export challenges.
Despite these restrictions, India managed to export a total of 17.17 Lakh Metric Tonnes (LMT) of onions during the fiscal year 2023-24. As of March 18, 2025, onion exports for the current fiscal year reached 11.65 LMT, indicating a steady demand in international markets. Notably, monthly export quantities have seen a rise, increasing from 0.72 LMT in September 2024 to 1.85 LMT in January 2025.
Price trends in the onion market have shown a marked shift in recent weeks. On March 21, 2025, the all-India weighted average modal prices for onions dropped by 39%, while the average retail prices decreased by 10% over the prior month. Key markets like Lasalgaon and Pimpalgaon reported modal prices of ₹1330 and ₹1325 per quintal, respectively, indicating that an increase in supply may be conducive to further price stabilization.
The Department of Agriculture & Farmers Welfare projects that the rabi onion production for this year will reach 227 LMT, which is over 18% higher than the 192 LMT produced the previous year. This increase is crucial, as the rabi crop accounts for 70-75% of India's total onion production, and is vital for maintaining price stability until the kharif crop becomes available in October and November.
The improved conditions in onion production and pricing serve as a welcome relief for the country, particularly since the economic landscape has been marred by lower domestic production and elevated international prices that began soaring in August 2023. The ongoing adjustments in the export regime, including the removal of the export duty, are expected to provide additional support to farmers and consumers alike.
In light of these changes, the government asserts its dedication to creating a balance in the market, with a spokesperson remarking, "We are committed to ensuring fair prices for farmers while maintaining affordability for consumers." This statement underscores the dual objectives of fostering a healthier agricultural ecosystem and safeguarding consumer interests.
As one of the world's leading onion producers, India's handling of this essential crop carries significant implications not only domestically but also in international markets. The timing of these policy shifts suggests a concerted effort to stabilize conditions for both farmers and consumers and encourage sustainable growth in the agricultural sector.
In conclusion, the removal of the export duty on onions signifies a strategic pivot by the Indian government aimed at bolstering the agricultural economy while ensuring that the staples remain within reach for everyday consumers. As production forecasts perform better than in previous years, there is optimism that these changes will lead to a more stable and prosperous outlook for both farmers and consumers in the months ahead.
